Lenovo
Lenovo Group Limited, trading as Lenovo, is a Hong Kong–based Chinese multinational corporation and technology company specializing in designing, manufacturing, and marketing consumer electronics, personal computers, software, servers, converged and hyperconverged infrastructure solutions, and related services. The smartphone brand is Motorola Mobility. Its global headquarters are in Beijing, China, and its North American headquarters is in Morrisville, North Carolina, United States; it has research centers at these locations, elsewhere in China, Hong Kong and Taiwan, in Stuttgart, Germany, and in Yamato, Kanagawa, Japan.
Lenovo originated as an offshoot of a state-owned research institute. Then known as Legend and distributing foreign IT products, co-founder Liu Chuanzhi incorporated Legend in Hong Kong in an attempt to raise capital and was successfully permitted to build computers in China, and were helped by the American AST Research. Legend listed on the Hong Kong Stock Exchange in 1994 and became the largest PC manufacturer in China and eventually in Asia; they were also domestic distributors for HP printers, Toshiba laptops, and others. After the company rebranded itself to Lenovo, it merged with IBM's PC business which produced its ThinkPad line in 2005, after which it rapidly expanded abroad. In 2013, Lenovo became the world's largest personal computer vendor by unit sales for the first time, a position it still holds as of 2024.
Products manufactured by the company include desktop computers, laptops, tablet computers, smartphones, workstations, servers, supercomputers, data storage devices, IT management software, and smart televisions. Its best-known brands include its ThinkPad business line of notebooks, the IdeaPad, Yoga, LOQ, and Legion consumer lines of notebooks, and the IdeaCentre, LOQ, Legion, and ThinkCentre lines of desktops. Lenovo is also part of a joint venture with NEC, named Lenovo NEC Holdings, that produces personal computers for the Japanese market. The company also operates Motorola Mobility, which produces smartphones.
Etymology
"Lenovo" is a portmanteau of "Le-" and "novo", Latin ablative for "new". The Chinese name means "association", "associative thinking", or "connected thinking". It also implies creativity. "Lianxiang" was first used to refer to a layout of Chinese typewriters in the 1950s organized into groups of common words and phrases rather than the standard dictionary layout.For the first 20 years of its existence, the company's English name was "Legend". In 2002, Yang Yuanqing decided to abandon the Legend English name to expand beyond the Chinese home market. "Legend" was already in use worldwide by many businesses, making it impossible to register in many jurisdictions outside China. In April 2003, the company publicly announced its new English name, "Lenovo", with an advertising campaign including huge billboards and primetime television ads. Lenovo spent 18 million CNY on an eight-week television advertising campaign. The billboards showed the Lenovo logo against blue sky with a slogan that read, "Transcendence depends on how you think." By the end of 2003, Lenovo had spent a total of 200 million CNY on rebranding.
History
1984–1993: Founding and early history
Lenovo was founded in Beijing on 1 November 1984 as Legend by a team of engineers led by Liu Chuanzhi and Danny Lui. Initially specializing in televisions, the company migrated towards manufacturing and marketing computers.File:BeijingInstituteOfComputingTechnologyChineseAcademyOfSciences.jpg|thumb|In 1984, Lenovo was founded in Beijing by a team of eleven engineers from the Institute of Computing Technology of the Chinese Academy of Sciences, led by Liu Chuanzhi.Liu Chuanzhi and his group of ten experienced engineers, teaming up with Danny Lui, officially founded Lenovo in Beijing on 1 November 1984, with 200,000 yuan. The Chinese government approved Lenovo's incorporation on the same day. Jia Xufu, one of the founders of Lenovo, indicated that the first meeting in preparation for starting the company was held on 17 October the same year. Eleven people, the entirety of the initial staff, attended. Each of the founders was a member of the Institute of Computing Technology of the Chinese Academy of Sciences. The 200,000 yuan used as start-up capital was approved by Zeng Maochao. The name for the company agreed upon at this meeting was the Chinese Academy of Sciences Computer Technology Research Institute New Technology Development Company.
The organizational structure of the company was established in 1985 after the Chinese New Year. It included technology, engineering, administrative, and office departments. The group first attempted to import televisions but failed. It rebuilt itself as a company doing quality checks on computers. It also tried and failed to market a digital watch.
In May 1988, Lenovo placed its first recruitment advertisement on the front page of the China Youth News. Such ads were quite rare in China at the time. Out of the 500 respondents, 280 were selected to take a written employment exam. 120 of these candidates were interviewed in person. Although interviewers initially only had the authority to hire 16 people, 58 were given offers. The new staff included 18 people with graduate degrees, 37 with undergraduate degrees, and three students with no university-level education. Yang Yuanqing, the current chairman and CEO of Lenovo, was among that group.
Liu Chuanzhi received government permission to form a subsidiary in Hong Kong and to move there along with five other employees. Liu's father, already in Hong Kong along with Lui, furthered his son's ambitions through mentoring and facilitating loans. Liu moved to Hong Kong in 1987. To save money during this period, Liu and his co-workers walked instead of taking public transportation. To keep up appearances, they rented hotel rooms for meetings.
In 1990, Lenovo started to manufacture and market computers using its own brand name. Some of the company's early successes included the KT8920 mainframe computer. It also developed a circuit board that allowed IBM-compatible personal computers to process Chinese characters.
1994–1998: IPO, second offerings and bond sales
Lenovo became publicly traded after a 1994 Hong Kong IPO that raised nearly at per share. Prior to the IPO, many analysts were optimistic about Lenovo. On its first day of trading, the company's stock price hit a high of and closed at suggesting an initial under-valuing of the company. Proceeds from the offering were used to finance sales offices in Europe, North America and Australia, to expand and improve production and research and development, and to increase working capital.By 1996, Lenovo was the market leader in China and began selling its own laptop. By 1998 it held 43 per cent of the domestic computer market share in China, selling approximately one million computers.
Lenovo released its Tianxi computer in 1998. Designed to make it easy for inexperienced Chinese consumers to use computers and access the internet, one of its most important features was a button that instantly connected users to the internet and opened the Web browser. It was co-branded with China Telecom and it was bundled with one year of Internet service. The Tianxi was released in 1998. It was the result of two years of research and development. It had a pastel-colored, shell-shaped case and a seven-port USB hub under its screen. As of 2000, the Tianxi was the best-selling computer in Chinese history. It sold more than 1,000,000 units in 2000 alone.
1999–2010: Merger with the IBM Personal Systems Group and sale of smartphone division
To fund its continued growth, Lenovo issued a secondary offering of 50 million shares on the Hong Kong market in March 2000 and raised about. It rebranded to the name Lenovo in 2003 and began making acquisitions to expand the company.Lenovo established a new holding company in 2005 through a two-way merger between it and IBM's personal computer business, the latter that had originally manufactured the ThinkPad laptop and ThinkCentre desktop lines. Lenovo's acquisition of IBM's personal computer division accelerated access to foreign markets while improving Lenovo's branding and technology. Lenovo paid for IBM's computer business and assumed an additional of IBM's debt. This acquisition made Lenovo the third-largest computer maker worldwide by volume. Lenovo's purchase of the Think line from IBM also led to the creation of the IBM/Lenovo partnership, which works together in the creation of Think-line of products sold by Lenovo.
On the purchase of IBM's personal computer division, Chuanzhi said in 2012: "We benefited in three ways from the IBM acquisition. We got the ThinkPad brand, IBM's more advanced PC manufacturing technology and the company's international resources, such as its global sales channels and operation teams. These three elements have shored up our sales revenue in the past several years." The employees of the division, including those who developed ThinkPad laptops and ThinkCentre desktops, became employees of Lenovo.
Despite Lenovo acquiring the "Think" brand from IBM, IBM still plays a key indirect, background role in the design and production of the Think line of products. Today, IBM is responsible for overseeing servicing and repair centers, and is considered an authorized distributor and refurbisher of the Think line of products produced by Lenovo.
IBM also acquired an 18.9% share of Lenovo in 2005 as part of Lenovo's purchase of IBM's personal computing division. In the years following the deal, IBM sold their stake in Lenovo, with a final sale in 2011 completing their divestment.
Mary Ma, Lenovo's chief financial officer from 1990 to 2007, was in charge of investor relations. Under her leadership, Lenovo successfully integrated Western-style accountability into its corporate culture. Lenovo's emphasis on transparency earned it a reputation for the best corporate governance among mainland Chinese firms. While Hong Kong-listed firms were only required to issue financial reports twice per year, Lenovo followed the international norm of issuing quarterly reports. Lenovo created an audit committee and a compensation committee with non-management directors. The company started roadshows twice per year to meet institutional investors. Ma organized the first-ever investor relations conference held in mainland China. The conference was held in Beijing in 2002 and televised on China Central Television. Liu and Ma co-hosted the conference and both gave speeches on corporate governance.
Lenovo sold its smartphone and tablet division in 2008 for in order to focus on personal computers and then paid US$200 million to buy it back in November 2009., the mobile division ranked third in terms of unit share in China's mobile handset market. Lenovo invested in a fund dedicated to providing seed funding for mobile application development for its LeGarden online app store. As of 2010, LeGarden had more than 1,000 programs available for the LePhone. At the same time, LeGarden counted 2,774 individual developers and 542 developer companies as members.